Earth economics studies the economy of our planet from the perspective of an autarkic system (a “closed economy”). It ignores the constituent national and regional parts of the planet economy and focuses on the whole. The book respects the heritages of IS/LM (Keynes) and neoclassical growth (Solow) not out of economic respect but because these tools are very useful in understanding the crisis and the policy response to that crisis.

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Sunday, September 27, 2015

Data for the world economy in the data base of the World Economy show a nominal decrease in Gross Planet Product in 2015. This contradicts the estimates for real growth and inflation (both 3%) that would be consistent with a nominal GPP growth of 6%. The inconsistency may be due to the fallacy of composition or to underlying country assumptions that are too optimistic or may reflect measurement error or wrong aggregation.